HC Deb 12 November 1992 vol 213 cc984-5
10. Mr. Duncan-Smith

To ask the Chancellor of the Exchequer how many G7 countries have achieved a fall in their debt-income ratio since 1980.

Mr. Nelson

Only the United Kingdom of the G7 countries has reduced its ratio of general Government debt to GDP since 1980. The ratio has fallen by over 19 per cent. to 35.4 per cent.

Mr. Duncan-Smith

Does my hon. Friend agree that these are significant figures? The simple fact that we are the only G7 country to have reduced the ratio, coupled with the earlier answer that, bar one, we are the lowest in the EC, makes a mockery of what the merchants of doom in the Opposition say when they make their comparisons with international figures. Does my hon. Friend agree that we should welcome these figures and trumpet them, which of course the Opposition will not do?

Mr. Nelson

My hon. Friend is absolutely right. Our public sector debt of £195 billion is relatively low compared with other G7 countries. We are in that strong position partly because of the repayment of significant amounts of public debt in the late 1980s and also because of the significant growth that has taken place under the Conservative Government.

Mr. Tony Banks

Do not the figures that the Minister has just announced to the House make a clear case for massive public sector investment by the Government?

Mr. Nelson

That is typical of the hon. Gentleman. His party has always been the party of big spenders at somebody else's expense. His party has no qualms about handing on an inheritance of increased debt to the next generation and it has no worries about the impact of extra borrowing on interest rates and inflation.

Mr. John Townend

Does my hon. Friend agree that to reduce national debt as a proportion of GDP to the level of 1991 means that we will have to bear down heavily on public expenditure not just this year but for the foreseeable future?

Mr. Nelson

Again, my hon. Friend is absolutely right to make strictures about the need to restrain public expenditure. Unless growth is to increase dramatically, we will need to restrain the extent to which the public sector borrowing requirement is allowed to rise. That has implications for fiscal policy as well.